Question

A company is considering purchasing a new piece of equipment for $$500,000.$ The equipment is expected to last for $8$ years and will have no salvage value at the end of its useful life. The company expects to generate additional annual cash flows of $$100,000$ from the use of the equipment. The company$$s required rate of return is $12\%.$ Should the company purchase the equipment based on the Net Present Value $($NPV$)$ method? Question

A company is considering purchasing a new piece of equipment for $$500,000.$ The equipment is expected to last for $8$ years and will have no salvage value at the end of its useful life. The company expects to generate additional annual cash flows of $$100,000$ from the use of the equipment. The company$$s required rate of return is $12\%.$ Should the company purchase the equipment based on the Net Present Value $($NPV$)$ method?